A new study from the Peterson Institute of International Economics (where I used to work) shows just how much of a sticker shock Americans should be prepared for.

Trump has proposed charging tariffs of 25% on imported cars, SUVs, vans, trucks and even auto parts. If implemented, the plan would "raise car prices significantly, suppressing sales and pushing some buyers with modest incomes out of the new car market entirely," write Peterson Institute scholars Mary Lovely, Jérémie Cohen-Setton, and Euijin Jung in their policy brief.

The authors use industry and consumer data to estimate that:

The average price of an entry-level compact car will increase between $1,408 and $2,057.

The price of a new compact SUV/crossover, the most popular vehicle in the country, will rise by $2,093 to $3,066.

More upscale versions of the compact SUV/crossover will rise by significantly more, $4,708 to $6,972.

Peterson Institute for International Economics

The auto sector has been a key component of the US economic recovery as sales benefited from the Federal Reserve's low interest rate policy and discounts from car dealers. The chart below shows disproportionate job growth in the auto industry and related sectors.

The expected price spikes would add to pressures already being felt from a rising interest rate environment as the US central bank looks set to keep tightening monetary policy.